Mark Pincus tells Rupert Murdoch what to do… and gives good advice, telling him to buy Craig’s List.
Only problem is, he sees newspapers as an asset and Rupert owns only one in America, last I checked. And, besides, I’m not sure how much of an asset newspapers really are in the world Mark pictures. He’s still thinking about centralizing content and advertising when they will inevitably become decentralized. Still, he’s giving good advice to any newspaper company in the country to reinvent itself. He’s suggesting ways to grow in the right places (content, community) and shrink in the right places (cost).
I don’t agree with his prescription for classifieds, because I think classifieds will become distributed — they will live wherever they live on the internet and they will be found via microformats, tags, and search. The market will become more efficient and the middlemen will choke. So middlemen will be the last people to change the business model. Says Mark:
i would work on using my newspapers to drive my online classifieds business. offer free liners (that’s the small text classifieds that use weird acronyms and are unreadable anyway) as an incentive to post online – ie. you get free newspaper placement for giving us the gift of your free online listing. maybe you can charge $5 but doesnt really matter. then i’d go for all color print classifieds for my cars and housing as that’s way better for consumers than bothering to go online – ie. a place the paper still wins.
They should only wish.
But then Mark moves onto content:
i would also transform my papers to more of an about.com model where most of my editorial/writing staff are part timers and a lot of my content is coming from other sources – ie. drastically lower my cost of content creation while increasing community involvement.
Right on.
And then advertising:
i would turn my ad people into reps for local media, both offline and online. i’d use myspace as an anchor tenant to create critical mass in local online page views to sell locally – ie. i go to philly.com and anyone else with philadelphia specific traffic and sell it as a package.
Right. The hyperlocal distributed ad network.
Multimedia?
oh, how about using my fox tv network as an inducement to get people to start creating video blog content for me for free?
The key is that you won’t make money by standing in the way, creating friction, making markets inefficient, the way newspapers and other media have. In the future, you’ll make money — less money, but the only money to be made — by enabling people to do what they want to do without the friction, in a very targeted and efficient way. And you’ll be involved in those transactions only if you truly help, if you’re needed — not if you interefere, not if you’re just a toy. That’s why Craig’s List is so valuable: Craig gets out of the way.
Mark reveals some of the research he did for Tribe, when he found the fleeting value of Friendster, which people saw as a toy while they saw Craig’s List as a utility.
myspace does risk the same extinction as friendster if they fail to convert the hours of play to minutes of utility….
so i will predict right here that if rupert and his team manage to create craigslist out of myspace they will have a massively valuable property. and i say good luck to rupert. he’s clearly having more fun than me!
In the end, what Mark’s really saying is that Rupert’s value is the power of promotion. OK. But note well that Fox TV took less time to build than, say, CBS… but Myspace took a helluva lot less time to build than Fox. Promotion isn’t the real value. Relationships are. Trust is.
